The cerebral cortex develops from the dorsal telencephalon, at the anterior end of the neural tube. Neurons are generated by cell division at the inner surface of the telencephalic wall (in the ventricular zone) and migrate towards its outer surface, where they complete their differentiation. Recent studies have suggested that the transcription factor Pax6 is important for regulation of cell proliferation, migration and differentiation at various sites in the CNS. This gene is widely expressed from neural plate stage in the developing CNS, including the embryonic cerebral cortex, where it is required for radial glial cell development and neuronal migration. We report new findings indicating that, in the absence of Pax6, proliferative rates in the early embryonic cortex are increased and the differentiation of many cortical cells is defective. A major question concerns the degree to which cortical defects in the absence of Pax6 are a direct consequence of losing the gene function from defective cells themselves, rather than being secondary to abnormalities in other cells. Cortical defects in the absence of Pax6 become much more pronounced later in cortical development, and we propose that many result from a compounding of abnormalities in proliferation and differentiation that first appear at the onset of corticogenesis.